USA Mortgage's owner is offering an employee stock ownership plan with the aim of helping it staff up as it expands outside its home market.

Full-time staff members now can receive shares in USA Mortgage's owner, DAS Acquisition Co., if they complete 160 hours of service and meet other qualifying criteria. Employees are fully vested in the plan after six years.

"There is no better way to thank the people who have helped us achieve success as well as reward those who will be leading the charge in the future," Doug Schukar, founder of USA Mortgage owner DAS Acquisition Co. LLC, said in a press release.

The terms of the company's recent 100% ownership transfer to the ESOP, which were based on an independent valuation of the privately held company, were not disclosed. Schukar plans to continue serving as CEO.

"I have no plans to retire," Schukar said. "I will continue in a role that supports our growth."

Doug Schukar
Doug Schukar is founder and CEO of USA Mortgage and DAS Acquisition Co.


DAS, operating as USA Mortgage, is licensed in 25 states with plans to expand to 48 by year-end. It originated $1.5 billion in loan volume last year. The company's roots lie in the St. Louis market and lending in Missouri alone accounted for $1.12 billion of its 2017 production.

The ESOP could help the company recruit as it expands, Schukar said.

Schukar, through DAS Acquisition Co., originally purchased USA Mortgage from internet lender LoanSurfer.com as part of an asset sale in 2001. He previously worked as a vice president in sales for LoanSurfer.com.

The possible transfer of company ownership to employees through an ESOP is something Schukar has been discussing with senior staff since 2015.

Other companies that have adopted various types of ESOPs include Churchill Mortgage, Fairway Independent Mortgage and Axia Home Loans.

"For executives that are ready for an exit as owners, this is great way to do it if they want to create an opportunity for the company they built," said David Lykken, founder and CEO of consultancy Transformational Mortgage Solutions. "You're going to find this trend continuing and growing."

An ESOP can be an easier way to transfer ownership than an acquisition by a buyer who is less familiar with a company and needs more time to review it, particularly if a seller is operating in a market with weaker volumes like the current one.

While ESOPs can be structured in various ways, shareholders typically get their return on the investment through distributions that occur when the company hits certain profit goals or when the company is sold to a new owner.

"You have to look at the downside and what's going to happen if you don't achieve those goals," said Rebecca Walzak, president of rjbWalzak Consulting. "If the company does well, you do well. It's a good, positive motivator, but you have to understand what you're getting into. If you don't have the right management in place, it's going to be much riskier."

Another risk for employees to consider is that as more shares are distributed, ownership positions can become diluted, Walzak said.

Depending on the state, there is some flexibility for a company to address this concern by creating different classes of stocks, some of which are more valuable than others. So a company could, for example, give employees with longer tenures more valuable shares than those who are hired later.

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